Unemployment Compensation Reform Legislation Endorsed by York County House Republicans

6/6/2012

HARRISBURG – Senate Bill 1310, which addresses the insolvency of Pennsylvania’s Unemployment Compensation Trust Fund, received support from the York County House Republican delegation during today’s concurrence vote. The bill, which will allow Pennsylvania’s Department of Labor and Industry to refinance loans from the United States Department of Labor, is expected to be signed into law by Gov. Tom Corbett.

“Pennsylvania maintains one of the costliest unemployment compensation programs in the country, soaking employers and employees alike.Pennsylvanians contribute significantly more to our Unemployment Compensation Trust Fund than the national average for other states’ employees. In the same vein, the average annual contribution paid by Pennsylvania employers is the ninth highest in the nation, according to the latest figures. The result leaves our Unemployment Compensation Trust Fund operating under a structural deficit.

“Consequently, the insolvency of our unemployment compensation system impacts the ability of Pennsylvania businesses to hire new employees and maintain the staff they have in place, making Senate Bill 1310 a piece of jobs legislation we desperately need in order to move our economy forward. Our debt to the federal government from money borrowed to pay unemployment benefits is approaching $4 billion. Factor in the relatively high interest rate on this borrowing, and you have an economy that cannot gain any traction.

“Senate Bill 1310 will allow the Department of Labor and Industry to apply to the state Economic Development Financing Authority (PEDFA) for funding to repay federal loans to the Unemployment Compensation Trust Fund. That provision does not exist in current law.When Governor Corbett signs this bill, the Department of Labor and Industry will be able to refinance the federal debt and obtain lower interest rates in the open market, resulting in lower costs to employers.

“We are pleased Senate Bill 1310 was amended to include a measure from Grove’s House Bill 1852, which addresses fraud in the system. The legislation, which passed the House in March, will increase the department’s look back window from six to 10 years to collect fault overpayments.These are payments made to a claimant who was ineligible but who lied or misrepresented facts to receive benefits.The Department of Labor and Industry requested this language be included in the final product, and we believe it strengthens our comprehensive unemployment compensation reform.”